View Full Report
Executive Summary

Institutional investors around the world report spending more than $12 billion on their trading desks last year as they raced to keep pace with the growing speed of electronic markets, changes in market structure and lower trading costs.

  • In 2014, nearly two-thirds of the budgets supporting buy-side trading desks went to trader compensation. The remainder was spent on spent on technology, including software, hardware and infrastructure.
  • Sixty percent of the technology spend went to fixed income, where trading desks are navigating the movement of increasing amounts of trading volume to electronic platforms.
  • Order Management Systems (OMS) and market data terminals remain the top two technology expenses for buy-side traders, accounting for 53% of the total technology budget.

Fixed-income trading desks remain in an investment phase, with spending up 11% from 2013. The market structure for government and corporate bonds continues to evolve, as investors focus on better access to both liquidity and improved cost analytics.

The importance of human capital on bond trading desks is also important with budget allocated for trader compensation growing in 2014.

Methodology

Between August and September 2014, Greenwich Associates interviewed 358 buy-side traders across the globe working on equity, fixed income or foreign exchange trading desks to learn about trading desk budget allocations, trader staffing levels, OMS/EMS/TCA platform usage, and ATS satisfaction levels.

The data reported in this document reflect solely the views reported to Greenwich Associates by the research participants. Interviewees may be asked about their use of and demand for financial products and services and about investment practices in relevant financial markets. Greenwich Associates compiles the data received, conducts statistical analysis and reviews for presentation purposes in order to produce the final results. Unless otherwise indicated, any opinions or market observations made are strictly our own.

© 2015 Greenwich Associates, LLC. Javelin Strategy & Research is a division of Greenwich Associates. All rights reserved. No portion of these materials may be copied, reproduced, distributed or transmitted, electronically or otherwise, to external parties or publicly without the permission of Greenwich Associates, LLC. Greenwich Associates®, Competitive Challenges®, Greenwich Quality Index®, Greenwich ACCESS™, Greenwich AIM™ and Greenwich Reports® are registered marks of Greenwich Associates, LLC. Greenwich Associates may also have rights in certain other marks used in these materials.